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What is time decay?

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Published on Mar 31, 2023 and edited on May 4, 2023 by Iron Brands

In digital marketing, time decay is a model for attributing credit for a conversion to the marketing channels and touchpoints closest to the conversion. This model is known as last-click attribution because it gives credit to the last channel or touchpoint with which the customer interacted before making a purchase.

The time decay model is based on the idea that the closer in time a marketing channel or touchpoint is to the conversion, the more likely it is to have caused the conversion. This means that the last channel or touchpoint the customer interacts with before making a purchase is given the most credit for the conversion. In contrast, earlier channels and touchpoints are given less credit.

For example, consider a customer who searches for a product on Google, clicks on an ad, visits the website, and then makes a purchase. In this case, the time decay model would give the most credit for the conversion to the ad click, because it was the last interaction before the conversion occurred. Earlier interactions, such as the search on Google, would be given less credit.

The time decay model has some advantages and disadvantages. On the one hand, it is simple and easy to understand, and it can provide useful information about the performance of later-stage channels and touchpoints. On the other hand, it can be unfair to earlier-stage channels and touchpoints that may have played a crucial role.

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